How To Buy Pfizer (PFE) Stock – Forbes Advisor Canada

One of the largest pharmaceutical companies in the world, Pfizer’s name recognition has increased more recently thanks to the introduction of its COVID-19 vaccine.

Over the last 12 months, shares of Pfizer’s stock have gained approximately 47%. To put that into context, consider that the benchmark S&P 500 Index has increased by just 17% over the same period.

If Pfizer’s stellar performance has you considering investing your money, here’s how to buy Pfizer stock.

How to Buy Pfizer (PFE) Stock

1. Do Your Homework

Before you start buying shares of Pfizer, you need to do some research. The goal is to understand the company’s financial performance, company structure and their plans for the future, not to mention competitive threats.

As a publicly-traded company, you can view Pfizer’s annual and quarterly reports on its investor relations website or on the US Securities and Exchange Commission (SEC) database.

In 2021, Pfizer reported full-year revenues of $ 106 billion ($ 81.3 billion USD). According to Mike Clulow, a chartered financial analyst (CFA) and portfolio manager with EFG-Capital, Pfizer probably has a strong future.

“An investment in Pfizer could serve as a shock absorber for your portfolio, in the event that this pandemic lasts longer than anticipated,” says Clulow. He highlights that Covid-related products like Pfizer’s Comirnaty vaccine and Paxlovid antiviral pill, should account for roughly 50% of the company’s revenues in 2022.

Although Pfizer’s future post-pandemic is less certain, Clulow is optimistic. “Pfizer is taking the savvy approach of redeploying this short-term [COVID-19] windfall into longer-lived biotechnology assets [through mergers and acquisitions]”He said.

2. Choose a Brokerage

To buy Pfizer stock, you need to open a brokerage account. A broker serves as an intermediary between you and the stock market, facilitating the purchase and sale of securities like stocks and bonds.

If you don’t have a brokerage account yet, look for ones that have no trading fees and low investment minimums. Not sure where to look? There are several leading online brokerages in Canada, including Questrade, WealthSimple, TD Direct Investing, Interactive Brokers and more.

3. Choose an Account

Most brokerages offer multiple account options, and you should choose the one best tailored to your financial goals. If you are saving for retirement, choose an RRSP. An RRSP is a tax-deferred savings account that allows you to build wealth up to an annual limit ($ 29,210 in 2022). You don’t have to pay tax on the growth of your RRSP until you start withdrawing from it. You can withdraw funds at any time, but you have to start withdrawing ultimately by the end of the year you turn 71.

If you want to invest to grow your money but don’t have a specific goal in mind and don’t want to worry about withdrawal penalties or investment limits, another option is to open a taxable investment account. There aren’t any tax benefits, but you aren’t limited in how you use the money or how much you can have in your account.

4. Figure Out How Much You Can Invest

Once you have a brokerage account, consider how much money you can afford to invest in Pfizer stock. When deciding on how much to invest, consider the following things:

  • Take care of your budget first. After paying your bills, make sure you’re setting aside funds for retirement and your emergency fund. Then decide how much of the money you have left over after taking care of these three things to invest in stocks like Pfizer.
  • Think about your investing strategy. Once you’ve decided to buy shares of Pfizer, you need to choose whether to invest in a lump sum amount or use dollar-cost averaging. Some people prefer lump sum investing if they feel a stock’s price is particularly low, while dollar-cost averaging allows you to buy shares at regular intervals and potentially lower your risk.
  • How would Pfizer fit in your overall portfolio? Before investing in individual stocks, think about your goals and the rest of your portfolio. Putting too much of your portfolio in a single company can be risky; for most, it’s better to have a broad range of different assets.

5. Place an Order for Pfizer

After deciding how much to invest in Pfizer, it’s time to buy the shares. Log on to your brokerage account and enter PFE — Pfizer’s stock symbol — plus the number of shares you want to purchase. If your platform allows you to buy fractional shares, enter the dollar amount you want to invest in Pfizer. In Canada, only Interactive Brokers and WealthSimple offer the ability to buy fractional shares.

When buying shares of stock, you typically choose one of the two most common order types: a limit order or a market order. Market orders are completed right away at the current price, while limit orders are only processed once the stock reaches a price you set. If you’re expecting the price to change, a limit order could be a useful option.

Pfizer is traded on the New York Stock Exchange (NYSE), the world’s largest stock exchange. Its trading hours are Monday through Friday from 9:30 am until 4:00 pm EST, but you may also be able to take advantage of after-hours trading at most brokerage platforms.

6. Keep Currency Conversion Fees In Mind

If you’re buying American stocks with Canadian dollars, your brokerage will charge you currency conversion fees. These fees range from 1% to 4% and are charged when you convert Canadian to American dollars at the time of purchase and then again when you sell your stock and your US dollars are converted back into Canadian.

These currency conversion fees come on top of the regular exchange rate, but they can be avoided. You can either open a US dollar bank account at a Canadian bank and keep the American money you use to buy American stocks in US currency or you can save on currency conversion fees by performing Norbert’s Gambit.

Norbert’s Gambit is when you buy a stock or ETF that’s interlisted on American and Canadian stock exchanges. You buy Canadian shares of that stock, then you ask your brokerage to “journal over” your Canadian shares into the American listing and make them into American shares of the same stock. You then sell your American shares and can use the US dollars that result to purchase any American stock or ETF you want (including Pfizer) without converting currency.

How to Sell Pfizer Stock

Eventually you’ll want to sell your shares of Pfizer stock. The process is simple: Open up your brokerage platform, enter the number of shares you want to sell and Pfizer’s ticker symbol and sell at the current price, or set a minimum sales price.

If your investment has significantly increased in value, you may want to consult with a tax professional, such as a certified public accountant (CPA), before selling your shares. Selling at a profit incurs capital gains taxes, so a CPA can talk you through your options and discuss how to minimize your taxes.

You will probably only pay capital gains taxes to the CRA, as a Canadian investor in US stocks, unless you have a stake in an American corporation that’s 5% or more and the corporation’s primary asset is US-based real estate.

You will also have to pay the IRS estate tax if you make $ 5 million or more on your US investments when you die.

How to Invest in Pfizer Through Mutual Funds and ETFs

Pfizer is a large company that has been around for decades. However, that doesn’t mean Pfizer is guaranteed to continue to perform well. Like any other public company, Pfizer faces competition and market obstacles that could affect its future.

“Pfizer has been one of those pandemic winners and represents a potential victim of its own success,” Clulow said. “With the company poised to manufacture a billion vaccine doses per quarter in 2022, it will be near-impossible to maintain this momentum in 2023 and beyond. Will investors remain patient for the longer term story to play out? That is the question. ”

To reduce your level of risk, it’s a good idea to invest in many companies rather than just one. While you can invest by buying individual shares of different companies on your own, mutual funds and exchange-traded funds (ETFs) may be a more effective alternative. These funds invest in hundreds — even thousands — of companies at once, giving you instant diversification. And, many include Pfizer as one of their holdings.

For example, investors who want to invest in Pfizer could buy shares of the BMO Equal Weight US Health Care Hedged To CAD Index ETF or the iShares S&P Global Healthcare ETF (CAD-hedged), which is designed to replicate the S&P 1200 Healthcare Index.

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